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The prominent city councillor who received $275,000 in loans from a developer and another businessman has experienced financial difficulties, public records suggest.

Though the loans Councillor Giorgio Mammoliti took are not illegal, councillors of all political stripes have criticized him for accepting money from people who have had business before council. His financial situation may help explain why he decided to turn to non-traditional lenders, at least one of whom charged him a high interest rate.

In a divorce filing in May of last year, Mammoliti reported $175,000 in annual spending, $70,000 more than his annual income of $105,000. He also reported $1,044,513 in debts compared with $515,500 in assets.

Mammoliti declared bankruptcy in 1997, listing $291,041 in liabilities to $8,496 in assets. He was elected to council in 1995, the same year he completed his single term as an NDP MPP. MPPs then made $56,378. Councillors now make $102,608.

Mammoliti’s finances came under scrutiny when it emerged last week that he had arranged $275,000 in loans through two people, developer Mac Champsee and realtor and property owner Ralph Nardi, whose applications for lucrative billboards he had supported at community council meetings.

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The terms of the $75,000 Nardi loan have not been disclosed. But the $200,000 loan from a company Champsee was affiliated with, Tradesea International, came at an interest rate of 12 per cent. The loan, made in 2007, was a second mortgage on a rental building then owned by Mammoliti and his wife.

“If I remember correctly, he was looking for my father’s help in arranging some financing. But second mortgages are trickier to get than first mortgages. And so we worked something out,” Champsee’s daughter, Sonal Champsee, said last week.

The finances of other members of council are not known; Mammoliti’s records are only public because of his divorce. Ontario, unlike Newfoundland, does not require municipal politicians to disclose their interests in companies and in property.

Asked Friday whether he has financial problems, Mammoliti responded only, “Leave my family alone.” He described the loans as a “personal” issue unrelated to his public position.

“While I accept challenges about my decision-making as a councillor, to blatantly issue a story that has no relevance to my job and involves my family and personal relationships, I find to be in very poor taste. I respectfully request to leave my personal dealings and my family out of the media,” he said in a written statement.

Mammoliti’s reported debts as of May 2012 included the mortgages on the rental property and a mortgage on property in Wasaga Beach. They also included $53,000 he owed to the city after a court ruled that council had improperly paid his legal costs.

His reported assets included land worth $234,721, vehicles and household items worth $147,500, and $8,000 in a safety deposit box.

Many of the debts may now be paid off. In August 2012, he and his wife sold their two rental properties, one for $929,000 and one for $299,000, land records show. In a July agreement outlined in their divorce file, they said they would direct the proceeds to various debts, including the Tradesea loan. Both Champsee’s daughter and Mammoliti say the loan has now been repaid in full.

In 2004 and 2006, Mammoliti (Ward 7, York West) had moved routine motions in support of Champsee’s two applications to build billboards facing Highway 401. The applications had been supported by city officials.

Mammoliti championed at least two billboard applications from Nardi in 2009. Those applications were opposed by city officials. His divorce records do not say when he received the loan from Nardi.

Mammoliti is a fiscal conservative who ran for mayor in 2010 and who was, until November, an outspoken ally of Mayor Rob Ford. His penchant for inflammatory statements and his unusual policy proposals have made him one of the best-known members of council.

Champsee’s daughter, who works with her father, said Thursday that she believed Mammoliti’s rental property had been foreclosed after Mammoliti and his wife failed to make mortgage payments. The couple did fail to make payments, and Deutsche Bank did issue a power of sale letter informing them that they were in default, but there was no foreclosure.

Champsee’s daughter said Mammoliti had approached her father for assistance. She said he had felt pressure to help a councillor he was worried about angering.

Mammoliti said in his Friday statement that the loan was “involving” a company “owned and operated” by his ex-wife; he did not acknowledge any involvement of his own in the company. In divorce filings, Mammoliti said he was a co-owner of the company, Aribella Property Management Inc. His lawyer also said Mammoliti signed binding legal documents for the company.

“Despite that the husband (Mammoliti) is not an officer or director of Aribella, he has always managed the affairs of Aribella together with the wife during the marriage,” the lawyer wrote in the filing. Mammoliti, he wrote, continued to be actively involved in the company “until in and around June 2011, when the wife changed the bank accounts of Aribella and changed the locks to the properties.”

Both Mammoliti and his wife personally guaranteed the loan. In their divorce filings, they blamed each other for the failure to keep up with the mortgages.

In his statement, Mammoliti said he has supported hundreds of billboard requests in his political career. These requests, he said, were merely for “upgrading already existing signs, which were in need of repair and would contribute to the revitalization of my community.”

Council records, however, show that while Nardi indeed sought permission to modify existing signs, Champsee wanted to erect new ones.

Mammoliti is facing significant new legal fees. The city’s compliance audit committee voted in February to pursue charges against him after an audit found that he exceeded the campaign spending limit by 40 per cent.

He became teary when discussing the costs of the case. “I can honestly tell this city that it is going to take 20 years to pay this off,” he told the Sun.

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